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February 03, 2016
Exxon Opts for Business as Usual on Climate Change
    by Robert Kropp

The oil and gas giant challenges a shareowner resolution from Interfaith Center on Corporate Responsibility members, requesting that it commit to global temperature increase limits.


The science of climate change has been definitive for many years; and finally, after as many years of wasted efforts, the nations of the world came together at the COP21 conference and agreed to science-based limits on greenhouse gas (GHG) limits. Of course, the implications for energy companies are pronounced, if, as nations agreed, global temperature increases are to remain below two degrees Celsius; for example, most of the reserves already on the books of fossil fuel companies as assets—perhaps as much as 80% of them—will have to stay in the ground.

Sustainable shareowners have been challenging energy companies over environmental issues for decades. Now, perhaps emboldened by agreement from national governments, faith-based members of the Interfaith Center on Corporate Responsibility (ICCR) have framed the issue in moral terms.

A shareowner resolution filed with ExxonMobil requests that the company “adopt a policy acknowledging the imperative to limit global average temperature increases to 2°C above preindustrial levels, which includes committing the Company to support the goal of limiting warming to less than 2°C.”

“ExxonMobil should assert moral leadership with respect to climate change,” the resolution continued. “This policy would supplement ExxonMobil’s existing positions on climate policy.”

According to an ICCR press release, “Co-filers of the resolution, led by the Sisters of St. Dominic of Caldwell, NJ, include 34 institutional investors representing a cross-section of faith-based investors, health systems, socially responsible asset management firms and indigenous and community groups.”

Considering the fact that Exxon’s funding of climate skepticism and denial occurred even as the company’s own scientists confirmed the reality of climate change, one might think that the company might seek to make at least minimal amends by adopting the policy called for by ICCR members. Given also that the nations of the world have come together in agreement over just such a policy, one might further believe that Exxon’s corporate social license to operate could rely on the adoption of the policy.

Instead, Exxon has challenged the resolution at the Securities and Exchange Commission (SEC), seeking to have it excluded from this year’s proxy statement. According to the company, the shareowner’s request that it adopt a policy “committing the Company to support the goal of limiting warming to less than 2°C”… “is so inherently vague and indefinite as to be materially misleading.”

Exxon also asserted that it has “already substantially implemented the Proposal.”

But the shareowners, according to ICCR, “argue that the resolution is clear and specific, and that the company has not met the principal request of the proposal: a commitment to support the 2°C goal to mitigate the worst impacts of climate change on the poor and the planet.”

“The moral dimensions of climate change are clear,” Sister Patricia Daly said. “This challenge demonstrates that ExxonMobil plans to continue to cling to an unsustainable paradigm that severely harms our planet, without reflecting on the moral dimensions of a ‘business as usual’ scenario.”

“Investors see the enormous risks Exxon Mobil faces related to climate change and are frustrated by this recent attempt to once again shirk its responsibility to address it,” Sister Daly continued.

 

 
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